Managing your Portfolio

[dollardaze]

It's good for long-term investors to not worry a lot about some temporary downturns in your portfolio's value, since your expectations should be based on the long-term. This does not mean that you should not periodically check to see how your portfolio looks though.

If it's been awhile since you checked your portfolio, you need to look to see how much is invested in cash, stocks and bonds. The recent years' surge in the stock market could have increased the amount of stock you now have in your portfolio, so you need to be sure that the percentage of stocks you have is what your investment plan originally called for, as this would increase your risk. You may want to sell some of your stocks in this case.

Now is a good time to see if you are still within your budget. If you have planned to spend a certain amount on entertainment for the year, and have exceeded half your budget for the year, you will need to curtail that spending for the rest of the year, in order to be sure that you will not have to tap savings or investments to pay for the excessive expense.

If you have Municipal Bonds, now is the time to check these out, as June and July are typically the time in which Municipal Bonds mature. Determine whether your investing timline, goals and risk tolerance have changed or not. If not, you may want to buy more bonds to replace those that have now matured. Your main criteria for determining how these bonds fit into your investment strategy should be your tax bracket, your investment objectives, and your need for federally tax-free income.

You should be aware that a lower interest rate may be awarded on any municpal bonds that you purchase today, because these bonds are exempt from federal taxes. This means that you may get a better return after taxes by buying the bonds and then holding them until they mature. Also be aware that the bonds could be subject to other taxes, such as local and state.